Sellers and brands have been complaining to regulators about blatant violation of regulation and guidelines by Flipkart for a long. It’s a known fact that major marketplaces including Amazon and Flipkart openly violate press note 2 by influencing prices and deep discounting among others.
This again proved from GOQii accusations and Bombay Civil Court intervention. The fitness-focused firm had sent legal notices to Flipkart over steep discounting on its flagship fitness band and other products.
Passing an ad-interim order, the session court has barred Retailnet, Tech-connect and Flipkart from selling GOQii products to prevent further unascertainable damages that are going to be caused to GOQii owing to the online deep discount sale.
This is a huge relief for GOQii that has been facing backlash from offline and online partners over deep discounting. The allegation levelled by Gondal and his firm also put Flipkart on regulator’s radar in upcoming meetings by Department of Promotion of Industrial and Internal Trade (DPIIT) and commerce ministry.
Earlier this week, GOQii reached out to DPIIT and Competition Commission of India (CCI) elaborating how Flipkart’s practices are violating the norms of Competition Act 1972 with 70-80% discounts on its products.
Deeming the allegations baseless, Flipkart replied to GOQii notice that it doesn’t decide the discounts and prices of the products on its platforms, except for its private labels. The Bombay session court orders is a blow to Flipkart’s defence.
Flipkart was openly selling GOQii products less than half of its original price through the network of its shell or shadow entities. According to Entrackr’s sources, it was even less than the manufacturing cost.
Gondal had claimed to have WhatsApp and e-mail based evidence that proves how Flipkart controls the pricing, contrary to what Walmart-owned company has been claiming.
Sellers bodies such as All India Online Vendors Association (AIOVA) has been relentlessly raising the issue of predatory pricing by Flipkart and Amazon. In the past, it filed a petition with the CCI against Flipkart’s WS Retail for indulging in predatory pricing. It also raised similar complaints against Amazon’s Cloudtail and Appario Retail.
Since Gondal claims to have evidence to prove that Flipkart had influenced the pricing of its product line and written letter to CCI and DPIIT, the newly elected government likely to investigate Flipkart and Amazon continuous circumvention of regulations.
Going forward, it would be crucial to observe how the government and its agencies prevent Flipkart and Amazon from violating e-commerce policies and press note 2.